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Biofuels Cooperation

Interview: Nick AmiesOctober 5, 2008

DW-WORLD.DE talked to Ricardo Dorneles, the secretary for biofuels in Brazil's ministry for mines and energy, about his country's biofuels industry and Brazil's relationship with the EU.

A combine harvester is seen as sunrise in a corn field
Brazil has been criticized for allegedly using food producing arable land for biofuel purposesImage: AP

After the European Union reduced its target for using traditional biofuels from crops in petrol and diesel as part of the its plan to fight climate change in September, questions on how this would affect the global production of biofuels began to arise.

Would the change in focus to electricity or hydrogen from renewable sources, or second-generation biofuels from waste, have serious repercussions for nations like Brazil which have heavily invested in biofuel technology and production? Would the EU's new stance create more friction in an already fractious debate where accusations of self-interest and protectionism are commonplace?

Ricardo Dorneles, the secretary for biofuels in Brazil's ministry for mines and energy, answers questions about his country's ambitions in the industry, its production practices and Brazil's role in the international debate.

DW-WORLD.DE: What are the levels of cooperation between Brazil and Europe in biofuel production? In which areas is cooperation more productive?

Ricardo Dorneles: The biofuel cooperation between Brazil and the European Union has come to a halt now because of the EU's policies on producing and using biofuel in its market. Talks on the directive that aims at revising biofuel targets, as well as adopting environmental criteria, have taken over the debate and harmed the progress of cooperation projects.

Because of Brazil's initiative in the International Biofuels Forum, which congregates the world's main biofuel producers and consumers, the area of cooperation that has seen greater advances lately is the assessment of conditions for aligning metrological standards for biofuels in Brazil, the United States and the European Union.

What are the main conflict areas between Europe and Brazil in biofuel production?

The European Union's subsidies for agricultural products and non-tariff barriers to Brazilian biofuels have been obstacles to a commercial integration between Brazil and the European bloc.

What are the differences in biofuel production and promotion between Brazil and Europe?

In Brazil, biofuels are produced based on free enterprise and supported and promoted by the government, especially in international forums by means of the Presidential Diplomacy. The president always emphasizes his support for producing biofuels as a means towards development and an option for poorer nations.

The European Union has lowered its target for using traditional biofuels from crops in petrol and diesel, with a view to using more second generation biofuels and other renewable resources. How will that affect Brazil and its biofuel industry?

A fuel truck passes a seed of rapeseed
The EU wants to use less first generation biofuelImage: picture-alliance/ dpa

Several governmental and private studies conducted by specialized agencies, such as EPE, Embrapa and CTC, and by universities such as Unicamp and Coppe, have demonstrated that Brazil has all the conditions to expand its biofuel production to levels much higher than currently seen. There is land, agricultural technology and industrial technology for the nation to meet consumption without harming food supply and the increase in grain crops, as demonstrated in the latest years.

Research is also being conducted to produce biofuels from cellulose materials, and a significant productivity gain is expected in the transformation of sugarcane bagasse in ethanol.

How does Brazil intend to reinforce and improve its position as the world's second biggest ethanol exporter? Does Brazil intend to become the world's biggest exporter of ethanol?

Brazil is currently the world's second biggest ethanol producer and the biggest exporter. However, the biggest goal in Brazil's biofuel policy is to promote international cooperation so that as many nations as possible may produce biofuels, which will increase the likelihood of commoditization. Brazil has been doing its part by signing cooperation agreements with nations from all continents, without any distinction, to promote biofuel production. Brazil understands that diversifying energy sources is key to reducing dependency on fossil fuels, which are becoming more and more expensive. And biofuels may certainly play an important role in this process.

How is the Brazilian government considering the potential environmental and economic costs of seeking ethanol production on a bigger scale? What measures are being taken to ensure sustainability?

An area of the Amamazon deforestated by soybean farmers is seen in Novo Progreso, Para, Brazil
Brazil claims it does not need to claim land from the AmazonImage: AP

Brazil still has a huge agricultural frontier that can be used without compromising sensitive biomes such as the Amazon or the Pantanal. Livestock raising in Brazil is extensive and under-utilizes the land; breeding the livestock at a density much below the levels that can be reached to obtain greater productivity. As a consequence, degraded pastures can be released for sugarcane plantations in areas where new units are being built, or where existing ones are being expanded.

The agro-ecological zoning studies for sugarcane in Brazil will be published soon. In practice, it will be an essential step to guide production expansion and ensure its sustainability.

A recent report said that Brazil's biofuel production will not affect food production or the Amazon deforestation in the next years. However, farmers are being encouraged to grow sugarcane for biofuels in the land formerly used for food crops. What's Brazil status concerning expanding sugarcane crops for biofuel? What underlies the argument that it is not the reason for the food crisis? Is the Amazon rainforest under threat?

It should always be taken into account that there will be some economic incentive to guide farmers' decisions on to how to use the land. However, in some cases the tradition or economic vocation of a certain region may preponderate and influence farmers' decisions. Their decisions are also influenced by other factors not under their control. For example, it would not make sense to grow sugarcane on their land, regardless of the crop's financial yield, unless there is a nearby industrial unit capable of absorbing their production.

The agro-ecological zoning studies to be released may come to demonstrate what is already known -- Brazil has spare land to expand sugarcane production and still increase food and grain crop production without compromising or threatening sensitive ecosystems and biomes such as the Amazon and the Pantanal.

Symbolbild Biosprit Nahrungsmittelknappheit
Brazil has seen increases in both food and biofuel productionImage: Picture-Alliance /dpa/AP

The main justification, from Brazil's point of view, for the inexistence of a threat to food crops is the fact that, in the latest harvests, an increase was seen in the production of raw material for biofuel and production and also an increase in the production of food and seed crops offered on the market.

The threats to the Amazon region are of a nature completely unrelated to the increase in biofuel production in Brazil. Linking both means could seriously harm the search for solutions aimed at maintaining the Amazon's biodiversity.

*See additional notes below.

Environmentalists say that biofuel production in Europe and Brazil is benefitting big businesses rather than local communities. Particularly, Brazil is being accused of increasing production to meet demand at the detriment of farms and of having four in ten ethanol producers backed by foreign investors. How do you respond to those accusations?

The energy market is one of the world's most income-concentrating markets. There is an undeniable income concentration in rich nations because of the energy market, which is strongly based on petroleum economics. Biofuels are a viable option to reduce fossil fuel dependency and keep money local, which certainly contributes to the local economy.

In the case of Brazil, the sugarcane industry is made up of more than 400 production units owned by more than 200 business groups. More than 60,000 sugarcane farmers are involved in the supply chain, and more than one million direct jobs are generated.

Additional notes and information:

* Dorneles claims that criticism of how biofuel production impacts food prices is not founded on scientific arguments and contains misconceptions. He says:

    1. It does not distinguish the different raw materials used to produce ethanol.
    2. It ignores the challenge of global warming and how to mitigate its effects.
    3. It does not take into account how rising oil prices have impacted food prices.
    4. It does not approach the effects of the US dollar devaluation and financial speculation over agricultural commodity prices.
    5. It does not consider the impact of the fast growth in food demand in emerging economies.
    6. It ignores adverse climatic conditions in agricultural nations.
    7. It underestimates technological evolution.
    8. It ignores the benefits that biofuel production may bring to developing countries, such as renewable energies, less oil imports, diversification of farmers' income and job generation in rural areas.

Relevant data:

• Areas with rice crops were reduced by 50 percent between 1976 and 2007, thus releasing approximately 3 million hectares for other crops.

• Even so, rice production increased by 50 pe cent in the same period, from 8 to 12 million tons, due to agricultural productivity gains.

• Coincidentally, areas with sugarcane crops for ethanol increased by 3 million hectares in the same period.

• Brazil's production of grain crops and sugarcane grew by 217 pe cent from 1976 to 2007.

Source: Brazilian Ministry for Mines & Energy